THE FARMERS' REGISTER, 



327 



per, or th© usual operations of banks of issue 

 anJ circulation. 



Tiie evils of the system, to be as concisely re- 

 capiiulciteti, are — 



Isi. — i'lie subsiitution and sending abroad the 

 previous metallic ciiireiicy, ol iniriiisu-., soliii, and 

 nearly invariable value, and winch noiliinif can 

 prevent a couniry's obtaining in siililcient quanti- 

 ties, il' It produces codimodiues to sell abroad ; or 

 make it lose, alier having' ottiained sucli a currency, 

 •except ihis policy of subsiituting it by a p.iper, or 

 other less valuable currency. So lar, the paper 

 currency may not be greaily redundant, nor sen- 

 sibly depreciated ; and the banking operations 

 honest and prudent, except so lar as the system 

 is necessarily dishonest in principle and unsale in 

 practice. And yet, external and unavoidable 

 causes may, and indeed must, sometimes bring 

 discredit on the paper currency, and consequently 

 suspension of specie paymenis by the banks. 



2d. — To the country, and especially lo its go- 

 vernment, the being suddenly brought by gene- 

 ral bank suspension, or stoppage of paymenis, 

 to the wretched and teeble condition ol being en- 

 tirely without money for domestic trade, taxes, or 

 to car."y on war — or any other than a discredited, 

 depreciated, and altogether pnsound currency, 

 which by the constituiion, and also by laws snll 

 in Idrce, is not legal money ; and there is at once 

 a general and total inability to comply with any 

 pecuniary obligations, and to pay any debts, at 

 the very time when the interest and the necessi- 

 ties ol creditors (produced by the general shock 

 lo credit,) require most strongly the speedy com- 

 pliance wiih such obligations. 



3d. — To individual creditors ; for this awful con- 

 flict of the rights of creditors, and the refusal of 

 banks to pay, and the inability ol' other debtors, 

 is soon ended by the inier()Osiiion of law, which 

 (though in opposition to the consiiiution and to 

 justice and to honesty,) legalizes the depreciated 

 paper currency, and therel)y confiscates as much 

 of every existing debt and contract, as is equal 

 to the measure of depreciation of the paper cur- 

 rency, then and thereafter. 



4lh. — To proprietors of land and ail other pro- 

 perty, in the change of its market price, and ap- 

 parent value, caused first by the depreciation of 

 the currency, and. then by ihe spirit of specula- 

 tion engendered by that depreciation, and ihe 

 false belief that the value of property had risen, 

 and continued rising, instead of knowing ihe 

 truth, that the currency had fallen, and was still 

 falling in value. And this great evil, tends to 

 convert the whole community lo sellers and buy- 

 ers, and speculators, to the general and great 

 injury of nearly all the individuals engaged. The 

 .fluctuations and successive changes of the rate 

 of depreciation, all serve lo magnify still more 

 the first and general evils of this kind. 



5th. — To the moral condition of society, disor- 

 dered and unhinged by the introduction and ex- 

 tensive diffusion of a spirit of speculation, and 

 love ol gambling adventure, prompted by nume- 

 rous examples of great Ibrtunes thus suddenly 

 acquired ; and the consequent neglect of, and 

 disgust for the pursuits of laborious and patient in- 

 dustry and frugality, formerly the only roads to 

 wealth and respectability. Thus, even when 

 the banking bubble has burst, and men are no 

 longer intoxicated and deluded by the offered 



I sources of wealth without labor, like other sud- 

 ! de'nly sobered drunkards they arc left in a state of 

 prostration both of body and miiul, and unfitted to 

 j return to their previous habits of judicious think- 

 1 ing and actniir. 



And these, and many more minor but yet im- 

 portant items, constitute the frightful price that a 

 lieople must pay lijr the lew real bcncliis ami con- 

 I veniences coniK'ct(!d with the Irauduicnl banking 

 system ; and which lew benefits may nearly, if 

 not quite, as well be secured by a banking system 

 I which, would be honest in principle, sale in opera- 

 i tion, and Iroin which all the great evils and dan- 

 ' gers of banks of circulation would be efiectually 

 excluded. Such a system, or at least some se- 

 cure steps ol' a[)proach to it, will be hereafter pro- 

 posed. But, inasmuch as a good system will be 

 j reached otdy by carefully avoiding the known 

 abuses of tlie existing bad banking system, it is 

 j proper first lo menuoii some other evils invariably 

 : attendant on and connected with the ordinary 

 procedure of banks, but which in lact are not at all 

 necessary to the best working of even the previous 

 j bad system, as designed by law. We shall very 

 concisely refer to these several minor abuses, 

 which are too notorious to require proolj either of 

 their existence, or their evil effect. 



XVIII. Abuses in the selection, and ojficial rnflu~ 

 ence, of bank directors. 



The persons who are always the most zealous 

 and active to obtain the enactment of banking 

 privileges, and the greatest possible extension of 

 banking operations — who assume to monopolize 

 all the practical and uselul knowledge on the sub- 

 ject that is extant — who are the most influential 

 and successliil in spreadirig delusion in regard to 

 banking -these persons are not actuated by the 

 |)ublic and general interests which belong to all 

 citizens, nor by even the peculiar interests of capi- 

 talists who seek lo make profitable investments; 

 but they beloni; to, and indeed may be said to con- 

 stitute the great borrowing interest, or class of 

 merchants and dealers who, being either without 

 capital, or but very insutficienily provided, are 

 anxious lor the establishment, in any manner 

 whatever, and without regard to other interes's 

 than their own, of new and more available sources 

 of loans to themselves, to enable them lo carry 

 on iheir unsubstantial and hazardous business and 

 speculations. This class of people, in the gene- 

 ral, see nothing whatever in the banking system, 

 and learn and care for nothing in regard to it, but as 

 it oHers means lor obtaining loans lor themselves; 

 and the greater the abuses of the sys'em in its 

 subsequent procedure, the more it will be lauded 

 by this class, provided these abuses tend (as they 

 certainly will,) to furnish them with larger loans, 

 and longer times for payment. 



But the worst part of this evil is yet to come. 

 When banks are chartered and put in operation, 

 it is out of this very class of borrowers that the 

 boards of directors are always principally consti- 

 tuted; and who, even if not always the most nu- 

 merous, are sure to be the most active and influ- 

 ential members of the directory of every bank. 

 If ihere should, perchance, be one or two other 

 directors of a board, having no connexion with 

 trade, and who are actuated by no other than the 

 common and public interest, they are ready to ad- 



